This paper presents a simple model of risk-averse banks that face uncer-tainty over funding conditions in the money market. It shows when increasedfunding uncertainty causes interest rates on loans and deposits to rise, whilebank lending and bank pro…tability fall. It also …nds that funding...

This paper presents simple conditions for monopoly third-degree price discrimination to have negative or positive e¤ectson aggregate consumer surplus. Consumer surplus is often re-duced by discrimination, for example when total welfare (con-sumer surplus and pro…ts) falls. Surplus increases...

Carbon leakage is a major concern for policymakers involved with environmentalinitiatives such as the European Unions emissions trading scheme and similar cap-and-trade proposals in the United States, Australia, and elsewhere. This paperprovides a framework for understanding the drivers...

Market share objectives are prominent in many industries, especially where man-agers pay much attention to league table rankings. This paper explores the strategicrationale for giving managers incentives based on market share in an oligopoly com-peting in strategic substitutes. Moreover, the...

The paper shows how commodity taxes can provide insurance to consumers when the producer price is volatile. Specific and ad valorem taxes have differing roles. The optimal specific tax is positive when demand has some elasticity. The optimal ad valorem rate is zero when demand is unit-elastic,...

Probably the most enduring result in the theory of optimum income taxation is that,for a sufficiently thin upper tail to the skill distribution, the marginal tax rate shouldfall rather than rise with income. This paper shows that this result is highly sensitiveto a very strong informational...

This study provides statistical evidence that Russian rural/urban wages diverged substantiallyduring the industrialization of Russia in the late nineteenth century. However, over time boththe variation declined and integration somewhat increased as rural labor responded to newopportunities. The...